Wednesday, October 14, 2009
Question on SWIFT
Tuesday, October 13, 2009
SWIFT - An Overview contd...
Swift introduced ‘Connect 400’ to plug the problem created by Transmatic Systems. The PC Connect along with Connect 400 was taking care of the message to go from the batchfile to main server and vice versa and renaming the file after the batch is sent. The user can set the timing for scanning at 10 min, 15 min, 30 min etc as per the traffic load. So the time gap between transmissions of message from branch to swift is reduced. SWAP could not upgrade their product to plug this batch renaming problem and was discontinued by some banks and they switched to PC Connect. Now in the year 2000 after Y2K cut over SWIFT started aggressively marketing their new software.
By this time State Bank and Union Bank had upgraded their vax 3400 server with more powerful Alpha Servers which were cost effective and powerful. This ST 400 was running very smoothly and fast in these upgraded Alpha Servers also serviced by Digital and CMC.
Swift Alliance Access and the Swift Alliance Gateway wanted the banks using ST400 to switchover to Alliance suite of products. The platform offered was UNIX and Windows. VMS was scrapped and ST400 software was being phased out. Eventhough ST400 support was there for few more years, they made the banks buy this SAA/SAG by force selling the product.
During that period in the year 2002 Netik company came to India and were giving demos of ‘TurboSWIFT’ software which is an alternate to ST400 and had better features and it was already TCP-IP enabled whereas SAA was not TCP-IP enabled. The SAA vendors - Indigo Technologies went to the extent of giving wrong information and creating doubts in the mind of people about the ‘TurboSWIFT’ which is in fact a SWIFT approved software having better features and a strong audit trail used by many Banks worldwide.
After this Indigo, now taken over by SSI Technologies sold SAA to all the banks using ST400. Banks using Nova swift continued using Nova Swift. Swift then was busy changing the SAK (Swift Authenticator Key) to BKE (Bilateral Key Exchange) and introduced Secure Card Reader for the same. This was used to login and select to swift operations and also in exchanging keys automatically generated by computer. Here the manual exchange of keys was discontinued and all key exchange was automated and secured. After a few years the secure card reader was upgraded to accommodate 32 character security strings and was made more secure and strong.
There was an upgrade on the connectivity to swift and TCP IP enabled connection was introduced. The existing Leased and dial up standby connection to swift access point (SAP) was done away with and all users had to migrate to the new system by subscribing to one of the service providers namely AT & T, Colt, Equant, or Infonet. Majority of the banks signed up with Infonet and very few with AT&T and Equant. Colt had no presence in India.
The concept of digital signatures and RMA (Relationship Management Application) was introduced and implemented and BKE was discontinued. For this they required to install HSM boxes / HSM tokens depending on the volume of message traffic and the RMA Migration Phase 1 and 2 went very smoothly with Union Bank of India being the first bank in India to complete the migration successfully.
The advantages of this system were that the keys were permanent and that no renewal is required. Further selective restriction of tested messages being received can be enforced. Generally this is not done and all banks have test key for all the message types with whomever they are having testing arrangements. In the year 2009 Swift has planned to revise and introduce some message standards in November.
Over these years the swift support for SAA/SAG also saw changes as Indigo was taken over by SSI and subsequently SSI was taken over by Scandent and Cambridge taking over Scandent. In Indian environment support is expected to be given on all working days including Saturday and if need be on site also. Since the AMC is being paid for the software the company retained by swift is expected to give support. But it was surprising that Cambridge was charging extra for support and a contract for preventive maintenance was being taken from banks to give support on site. Now we hear that they want to charge for telephonic support also. Then Swift should not charge such exhorbitant sums for AMC. Further, this concept will not work in India. It is high time all the 15 vendors approved for swift software compete in India, and we have a choice to select the best suited for our requirement and who gives support like how we like to have and not end up paying for even talking to them.
Contributed By:
Mr. K.R.S. Mani
By this time State Bank and Union Bank had upgraded their vax 3400 server with more powerful Alpha Servers which were cost effective and powerful. This ST 400 was running very smoothly and fast in these upgraded Alpha Servers also serviced by Digital and CMC.
Swift Alliance Access and the Swift Alliance Gateway wanted the banks using ST400 to switchover to Alliance suite of products. The platform offered was UNIX and Windows. VMS was scrapped and ST400 software was being phased out. Eventhough ST400 support was there for few more years, they made the banks buy this SAA/SAG by force selling the product.
During that period in the year 2002 Netik company came to India and were giving demos of ‘TurboSWIFT’ software which is an alternate to ST400 and had better features and it was already TCP-IP enabled whereas SAA was not TCP-IP enabled. The SAA vendors - Indigo Technologies went to the extent of giving wrong information and creating doubts in the mind of people about the ‘TurboSWIFT’ which is in fact a SWIFT approved software having better features and a strong audit trail used by many Banks worldwide.
After this Indigo, now taken over by SSI Technologies sold SAA to all the banks using ST400. Banks using Nova swift continued using Nova Swift. Swift then was busy changing the SAK (Swift Authenticator Key) to BKE (Bilateral Key Exchange) and introduced Secure Card Reader for the same. This was used to login and select to swift operations and also in exchanging keys automatically generated by computer. Here the manual exchange of keys was discontinued and all key exchange was automated and secured. After a few years the secure card reader was upgraded to accommodate 32 character security strings and was made more secure and strong.
There was an upgrade on the connectivity to swift and TCP IP enabled connection was introduced. The existing Leased and dial up standby connection to swift access point (SAP) was done away with and all users had to migrate to the new system by subscribing to one of the service providers namely AT & T, Colt, Equant, or Infonet. Majority of the banks signed up with Infonet and very few with AT&T and Equant. Colt had no presence in India.
The concept of digital signatures and RMA (Relationship Management Application) was introduced and implemented and BKE was discontinued. For this they required to install HSM boxes / HSM tokens depending on the volume of message traffic and the RMA Migration Phase 1 and 2 went very smoothly with Union Bank of India being the first bank in India to complete the migration successfully.
The advantages of this system were that the keys were permanent and that no renewal is required. Further selective restriction of tested messages being received can be enforced. Generally this is not done and all banks have test key for all the message types with whomever they are having testing arrangements. In the year 2009 Swift has planned to revise and introduce some message standards in November.
Over these years the swift support for SAA/SAG also saw changes as Indigo was taken over by SSI and subsequently SSI was taken over by Scandent and Cambridge taking over Scandent. In Indian environment support is expected to be given on all working days including Saturday and if need be on site also. Since the AMC is being paid for the software the company retained by swift is expected to give support. But it was surprising that Cambridge was charging extra for support and a contract for preventive maintenance was being taken from banks to give support on site. Now we hear that they want to charge for telephonic support also. Then Swift should not charge such exhorbitant sums for AMC. Further, this concept will not work in India. It is high time all the 15 vendors approved for swift software compete in India, and we have a choice to select the best suited for our requirement and who gives support like how we like to have and not end up paying for even talking to them.
Contributed By:
Mr. K.R.S. Mani
Thursday, October 8, 2009
SWIFT - An Overview contd.
SWIFT In India
Reserve Bank of India introduced Swift messaging system in India in 1990 and it became operational in 1991. All Banks were forced to take the system even though it was very costly and the banks were in infant stage of computerization. The World Bank and IMF wanted the system introduced as the Banks in the West were already computerized and wanted the banks in the world to send them computer enabled messages so that it can be automated and manual intervention can be reduced.
At that time worldwide Telex and Telegrams were in use as the best means of communication but they had their own drawbacks and one of the prime focuses of this alternate system was to automate the TELEX messages. SWIFT brought together the Banking community and harnessed the developments in telecommunications and utilized them for international trade and messaging from one country to another in a big way. They could standardize all types of transactions and format the message types to be exchanged between two banks of different countries.
During the introduction of Swift the cost of two servers came to almsot Rs. 1 crore, the motorola codex modems costing 80,000/ each, and the software cost which was additional. The original swift ST 400 package purchased by banks were having both swift and telex messaging facility. In case message did not go through Swift it can be routed through Telex. But this telex function did not work from day 1 due to technical problem with DOT and many banks exchanged this software with PC Connect or taking additional licencce of ST400 for their foreign branches. It was a transformation and a change which simplified the messaging procedure and was easy to operate. THE MESSAGE STANDARDS were modified and changed many times as per the suggestions of the user community:
In the beginning the following hardware and software were available in India.
- Digital company's VAX 3400 servers and VMS operating system. This was serviced by Digital Company and CMC of India.
- 1) ST 200 or 2) ST400 software for swift operations.
Another software is NOVA Swift which was available and it was taken by few banks. Many Banks took ST400 and few of them took ST200 software marketed by Swift SCRL. The support for ST200 and ST 400 were provided by FINLINK, a software support firm. There was branch connectivity software PC Connect. But initially all banks took the main CBT product and simultaneously used the telex as well for communications. The PC Connect was also new and costly.
After initial teething troubles were over banks wanted to connect their branches with swift. Transmatic systems a vendor of telex was marketing SWAP a similar product like PC Connect for branch connectivity and it was working properly and the cost was low as around Rs 25,000/-per connection. The banks went for the same. Here the messages sent by the branch was sent to CBT by dial up mode using PSTN line and it was transported to the main server using batch input/output method. The problem was the messages going twice if the batch were not renamed after use. This was a risk and there was no alternative to it.
To be continued...
Contributed By:
Mr. K.R.S. Mani
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